Facing Funding Crisis, ALEC Hatches Plan to Attract New and Former Members

The American Legislative Exchange Council (ALEC), a right-wing, corporate bill mill, has created a scheme dubbed the “Prodigal Son Project” in attempt to win back more than 40 former corporate members who abandoned the group after the murder of teenager Trayvon Martin in February 2012.

ALEC is an outlet for extremist politicians and conservative ideologues to push laws such as the “Stand Your Ground” gun law, which allowed George Zimmerman to get away with the murder of an unarmed teenager. As a result of the controversy surrounding the case, the group saw an exodus of donors in 2012.

Documents acquired by the Guardian show that ALEC has lost the support of nearly 400 state legislators and more than 60 corporations over the past two years, including Amazon, Coca-Cola, General Electric, Kraft, McDonald’s, and Walmart. The significant loss of corporate funding led to a budget decrease of more than one third of ALEC’s projected income during the first 6 months of 2013.

The internal ALEC documents obtained by the Guardian also reveal that the group has created a sister organization called the “Jeffersonian Project” in response to concerns over possible government inquiries into its lobbying practices.

ALEC, which presents bills representing the interests of its corporate members to primarily conservative legislators to be presented in states across the country, is still registered as a federal non-profit, and thereby tax exempt, agency. If the government concludes that its activities constitute lobbying, ALEC could lose its tax-exempt status.

ALEC’s plan to create a sister organization is an attempt to avoid legal and ethical challenges as well as avoid paying taxes. The “Jeffersonian Project” would be classified as a 501(C)(4) social welfare organization, “a designation that would allow Alec to be far more overt in its lobbying activities than its current charitable status as a 501(C)(3).”

“Any activity that could be done by ALEC may be done by Jeffersonian Project if legal counsel advises it would provide greater legal protection or lessen ethics concerns,” a note on one of the documents states. Also among the documents was a letter from ALEC’s lawyer, Alan P. Dye, which says that “ALEC does not wish to be perceived as a lobbying organization and therefore does not wish to register as a lobbyist in any state.”

The letter further states that “ALEC has been approached by donors who are willing to make sizable donations, but insist that the donations go to a section 501(c)(4) organization. Jeffersonian Project would provide a vehicle to accept such contributions.”

In attempt to address a potential looming financial crisis, the organization even considered the gambling industry, particularly the online gambling industry, as a potential source of new members and revenue, though its board rejected the plan.

According to the Guardian, ALEC’s internal records show that the organization has 1,810 US state legislators among its members. That number has declined from 2,200 state legislator members in 2011. Private funding from corporate members has decreased from 280 in 2011 to 214.

As ALEC Exposed notes, “In most ordinary people’s view, handing bills to legislators so they can introduce them is the very definition of lobbying.” Yet, the organization has been allowed to persist as a non-profit, tax exempt group that creates corporate-friendly legislation since 1973. More than 98 percent of ALEC’s revenue comes from corporations, corporate trade groups, and corporate foundations. ALEC boasts that it is the origin of more than 1,000 bills introduced by legislators every single year.

ALEC’s next national meeting, the States and Nation Policy Summit, begins today in Washington, D.C. The summit will be attended and addressed by Tea Party favorites House Budget Committee Chairman Rep. Paul Ryan (R-WI) and Sen. Ted Cruz (R-TX).

A draft agreement prepared for ALEC’s most recent annual board meeting in Chicago proposed that the ALEC chairs in each state across the US, “who are drawn from senior legislators, should be required to put the interests of the organisation first, thus setting up a possible conflict of interest with the voters who elected them,” the Guardian reports.